tv Bloomberg Bottom Line Bloomberg April 17, 2015 2:00pm-3:01pm EDT
>> from bloomberg world headquarters in new york, i'm mark crumpton. this is "bottom line." the intersection of business and economics with a main street perspective. to our viewers in the united states and to those of you joining us from around the world, welcome. we have full coverage of the stocks and stories making headlines on this friday. julie hyman looks at the latest retail team up and phil mattingly has late developments
on hillary clinton's presidential campaign. first, let's get right to the top stories we're following on this friday. u.s. stocks retreated the most in three weeks as american express shares tumbled to their lowest level since 2013. data single stronger inflation and china tightened trading rules. the stick a quick check of the boards this afternoon, the s&p 500 is down one point -- one a third percent. the dow jones industrial tumbling down one .75% at 17,073. the nasdaq composite index is down 1.7% at 4922. a quick check of crude oil, half hour the close of trading in new york, crude is down 1.75% at 5573. inflation in the u.s. may be picking up. the core cost-of-living rose .2% in march for the third month in a row. that reflects broad-based
increases in rent, medical care and used cars. on a year-over-year basis, excluding food and energy costs, prices rose 120%. americans are growing more confident about the economy. the university of michigan consumer confidence survey rose this month to the second-highest level in eight years. consumers were more upbeat about the economy, the current financial situation, and the buying climates. and that's a look at the top stories we're following at this hour. we have breaking news u.s. antitrust lawyers are said to be leaning against the comcast time warner cable merger. let's go to the breaking news desk and our chief markets correspondence, scarlet fu. scarlett: staff attorneys at the doj's antitrust division are getting closer to recommending that they block comcast's bid to buy time warner cable. this is according to people familiar with the matter. you can see the impact on the
shares of comcast. this is comcast shares, there is a big leg lower when the news across the wire that antitrust lawyers are said to be leaning against this merger. we have come back a little bit we have been down all day, off by 2.5%. i'm going to pull up time warner cable shares as well. they are affected by this decision. you can see a big leg lower in time warner cable shares. while we have given back some of the losses, we are still down 5%. we are not backed were we were before this reporting headline cross. just to reiterate, staff attorneys at the doj's antitrust division getting closer to recommending that the doj not approve comcast's bid to buy time warner cable. you are seeing an impact on a day in which stocks were already lowered. we have seen a little bit of an edge backup, but this is a day in which we are sporting losses
of at least 1.3%. mark: scarlet fu, the breaking news desk. we will follow that story. stay with bloomberg television we have the latest details as soon as we get them. a study released today by the economic innovation group says the current economic recovery may be the slowest in 40 years. kevin is a cochair of the year ig, and director of economic policy studies at the american enterprise institute. he joins me from the bureau in washington. your study says the economic recovery is not as strong as it could be or can be. but even the white house of knowledge is this. is this about ineffective policy or dysfunctional politics? kevin: the crucial thing about the study which i co-authored with jerod bernstein, a white house economist, is that it is very nonpartisan. it's not about the past it's about where we right now and what can we do to make the world better place?
the study we released does not weigh in and try not to microscope on the current problem. there's an amazing amount of geographic disparity. people talk about income equality, but there are a lot of places that are stuck in a rut. policymakers have failed those places. mark: kevin, when you use the term economically as we saw in the report, are you suggesting that things aren't better when they were during the depths of this recession? kevin: there is no place that was worse than it was during the worst time in a recession. but there are a lot of places that have lost their way. i think one of the studies we site in the report that i found most troubling is that if you were to take the same kid and put them in a disadvantaged place, like detroit, and compare the outcome of that kid to a kid
they grew up in a normal u.s. town, the difference in the wages would be different than you might get from graduating high school and college together. if you take a disadvantage kittens to give it to savannah's community, there is an action negative effect of the community that housing members -- policymakers need to think seriously about. mark: we're going back to breaking news. we are learning that federal antitrust lawyers are said to be leaning against the comcast time warner cable merger and alex sherman joins me on the phone. thank you for the time. has significant is this? -- how significant is this? alex: extremely significant. this was the biggest deal of the year last year. traders have been watching this closely, as we are on well over a year since the deal was announced.
the initial reaction was that the deal would go through. more critics have come for pressing on the idea that comcast have too much say in the world of high speed broadband. even though they don't compete against each other, a deal would allow comcast to have such an overwhelming majority of highs. broadband access in the u.s. the regulators started to think you know, in this new world where television is going to be channeled also over the internet, and internet growth is so wide maybe we are reluctant on giving one company that also owns nbc universal so much control over the broadband pipes. i would have to be the legal argument, the main legal argument that lawyers would be recommending to the doj if, in fact they do block the deal as
we are reporting their leaning towards doing. mark: what about the lawsuit, could comcast still fight it? alex: they could. the entire time comcast has been saying there is not a strong legal argument to block this. even if the doj did block it there is nothing stopping comcast from fighting it. it's a hazy one. this is not a straightforward essay the last large telecom deal that was blocked, at&t and t-mobile. sprint try to merge with t-mobile last year. and decided it wasn't really worth it that they can tell the regulators were very much against it. they were strongly pushing back. that is not the case here. the reason this has gone on for even more than a year at this point is that this is a touchy one. it looked for a little while like maybe a deal would go through with heavy conditions also the obama administration has been straightforward in saying they would like a world where broadband internet is
regulated through a title to classification, which would mean that other than price regulation, which they set aside, broadband would be treated as utility, like the phone lines. that has thrown the discussion sort of into a different category. because now all of a sudden in a new world, to three years from now, maybe cable companies would not be able to simply jack up prices as much as they want to, which is really their main sensor revenue growth and profit growth at this stage. this really throws everything into chaos, and we will have to see how it all shakes out. mark: alex, what about the concerns that were expressed that consumers would be harmed of this merger went ahead? alex: this is a more touchy argument. there is no real hard and fast evidence that this would be the case. comcast and time warner cable were voted the worst to customer service companies international customer service survey this
pasture. from this standpoint, these copies were already so bad that there's not really a strong argument that customer service would get any worse. in fact, i can tell you that comcast has invested a lot more money in their network that time warner cable has in recent years. they have a lot more on demand programming. and they have a more cutting edge user interface. i would make the argument that customers that have time warner cable, if they were getting comcast, might get a better user experience, potentially for not that much more money. that argument i think is a hazy one. that could really go either way. i think people love to pile on the cable companies. but if you research and realize that comcast is done quite a bit to strengthen their network and their products, more so than time warner cable has. mark: alex sherman joining us on the phone. thanks again. that headline, staff attorneys at the justice department's nt
trust division nearing a recommendation to block the bid to buy time warner cable. we will continue to follow the story throughout the hour and get you more developments when we get them. let's go back to kevin, the cochair of the ig, economic advisory board. director of economic policy studies at the american enterprise institute. we were talking about the first white paper, which came out today about the u.s. economy. as you well know, economic recoveries are cyclical. what makes this one different from those of the past 40 years? alex: the biggest thing is something that wasn't a policy response, but rather the fundamentals of the problem which is when you have a financial crisis, we know from our work that it takes a really long time to recover. the problem we have is a country is that the really slow recovery has picked up well in some places and not another places. there are pockets of almost hopelessness right now, that may be macro federal policy isn't enough to address. mark: is tax reform the number
one issue the government must address to make capital accessible to distressed areas? with that show a benefits -- would that show immediate benefits? alex: you notice you can move your money around from the index 500 to the dividend growth or something like that. our view is that what we need to do is create a new kind of entity thing that people can put their money and that is guaranteed to invest in the most disadvantaged communities in our country. we think it would help folks answer the question or address the problem that they have that if you ask virtually anyone the medes -- anyone you meet that they want to help, but they don't have an answer. if you can put your money in an investment vehicle that has to invest in these places, then everyone can do it. we democratize that. we think it will become a new social nor for people who have some wealth to look to give back
to disadvantaged communities. the policies we had, while at times successful, haven't really had the scale they need to get everybody involved. we think that's the next step that can help save these communities. mark: kevin hassett, cochair of the eng. -- eig. up next, lily pulitzer and target team up. we dig into the numbers behind the partnership and we continue to follow the breaking news story, according to people familiar with the matter, staff attorneys of the justice department antitrust division nearing the recommendation to block the comcast bid to buy time warner cable. we continue to follow that story after the break. stay with us. you are watching "bottom line," on bloomberg television. ♪
a wide range of issues, including ukraine, libya, and the islamic state militants. they also discussed europe's economy and a trade pact between the u.s. and europe, climate change, energy security. the president greeted reporters with italian for good morning as they were brought in to the oval office to record the start of that meeting. it is something you rarely see in washington -- the president lining up with republicans on a bill opposed by many democrats. congressional leaders have agreed on legislation that would give the president the authority to finish to go shooting the transpacific partnership. unions and environmental groups are among those opposed. they see the deal could her wages and kill jobs. still republicans and some democrats want to give the president trade promotion authority to fast-track that deal. >> we need to be leading the world on trades. writing the rules in setting standards. if we don't, other countries like china most certainly will.
we can address all of these concerns by passing strong tpa legislation. mark: the white house is the deal would open more markets to american goods while preventing u.s. companies from outsourcing jobs. more now on the breaking news we told you about moments ago. federal antitrust lawyers are said to be leaning against the comcast time warner cable merger. we have bloomberg west editor-at-large cory johnson standing by in our san francisco bureau. corey, take us through this. cory: i think it's the most important issue, the idea that this one company, comcast, will be able to control as much as 50% of the homes receiving broadband and have a lock on that business. right now, there are debates. i think there is no other way to get through a high-speed connections into the home for most america, other than comcast
or time warner. while they don't overlap geographically, it can bind company would have a massive footprint in terms of providing internet access and all the things that go with that. this is an issue that has been of great concern. this company is spending tens of millions of dollars in lobbying trying to get their point across. if indeed the antitrust authority is looking at this and deciding not to do it, they will be flying in the face of a lot of money spent on lobbying. comcast has been pushing really hard to get this deal through. * -- mark: should we read anything into the timing of this news? cory: we expected they would have a decision in this timeframe. it's about what we expected. it has been delayed a couple of times. we were getting close to a final decision. it has enormous implications on a number of fronts. not least of which is the equipment spending for these companies. a merger not going through means more money will be spent on
equipment. it's good news for all the networking companies and so on. they would like to be selling in the than just one customer. i think the applications, the potential applications for issues like free speech are really important. it's also worth noting that these companies are both these companies when they deal with their customers have really crummy rankings in terms of the quality of their customer service. these two companies rated at the very bottom of all companies out there. that doesn't help them win a lot of friends in washington. mark: cory johnson, thank you so much. coming up on bloomberg television a colorful explosion is about a takeover target. the lowly bullets are -- the lilly pulitzer collection debuts on sunday. and we continue to look at ceo pay, a focus on apple. at 2:45, encore on "bottom line." we will be right back.
mark: more breaking news this afternoon. let's go back to scarlet fu at the breaking news desk with the details. scarlett: our team of bloomberg news is reporting discussions of a possible generic drugmaker merger. the pharmaceutical company based in israel is looking to take over mylan. this is according to people with knowledge of the matter. that would increase this to nora's -- this enormous generic drugmaker. they are aware of tecva's interest. they've approached advisers about the potential bid and
financing. if you look at how shares have reacted, this is teva. below the dotted line means it has been down all day long until this headline hit the water. there is this bike up, a leg higher. you can see we are up by 2.9%, 3% with teva trading. if i switch over to mylan. they just resume to trading, was halted from trading shortly because of this announcement during because there was a lot of interest in the stock. it just resume to trading, and it too has moved higher. up about 5.5% right now. mylan and teva is a deal potentially in the works. mark: this is something analysts had been exciting for a while. scarlett: yes, there has been a lot of movement among
pharmaceutical companies. one that people were looking at was mylan. this was something that had been discussed or speculated upon in the markets. nevertheless, you see when reporting comes across in the headlines at the water, you still get an immediate reaction the share price. mark: scarlet fu joining us from the breaking news desk. let three cap one of the other top stories we are following at this hour. more breaking news. we are learning that people familiar with the matter say that staff attorneys of the justice department's antitrust division are nearing a recommendation to block comcast bid to buy time warner cable. the people who asked not to be identified telling bloomberg that attorneys who are investigating comcast 45.2 billion dollar proposal to create a nationwide cable giant are leaning against the merger out of concerns that consumers would be harmed.
mark: welcome back to the second half-hour of " online" on bloomberg television. i am mark crumpton. thanks for staying with us. let's begin with the price of crude oil at the close of trading in new york. you see on your screen it is down about 1.3%. for the week, the chart shows crude is up nearly 8% at 5575. staff attorneys at the justice department antitrust division nearing a recommendation to block comcast's bid to buy time
warner cable according to people familiar with the matter. attorneys investigating the proposal that would create a nationwide cable giant are leaning against the merger out of concerns consumers would be harmed and could submit their review as soon as next week. the antitrust lawyers will present their findings to the deputy assistant attorney general for antitrust who will decide along with the top officials whether to file a federal lawsuit to block the deal. teva pharmaceuticals is exploring a takeover offer from mylan. it is a potential move that would create a global generic drug giant. teva has not made a formal approach yet though mylan is aware of interest. teva is evaluating the purchase internally and has approached advisors about a potential bid and financing. by one measure, general electric posted first-quarter profit that beat estimates. rising sales of power generation equipment offset the drag on the oil filled machinery business --
oilfield machinery business. >> we see the u.s. getting better every day. europe is slightly improving. china remains good. resource rich markets are mixed. we expected a positive revenue in places like the middle east latin america, and africa. mark: g.e. posted an overall loss of more than $13 billion because of costs linked to the sale of most of the assets in its finance unit. the worst performer on the dow this year is down again. american express falling after reporting first-quarter earnings. they posted sales that missed estimates. the company is under pressure to show how it can recover from setbacks including the end of a partnership with cosco. the c.e.o. said he expects earnings this year to be flat or slightly down. that is a look at the top stories we are following on this friday.
fans of the designer clothing showed up at bryant park yesterday waiting for the chance to shop the target collection in a special one-date pop-up shop for the collection -- before the collection officially hits stores. it is the latest example of the much-hyped designer collaborations. julie hyman is here to talk about the strategy behind these special collections. what is target hoping to achieve? julie: basically buzz. they have done these collaborations before. the aim does not seem to be to boost sales. the company and analysts told me it will not be material to the bottom line. it is more creating excitement around the brand maybe getting some people back to the brand who left in the past few years. once they are there, perhaps they will buy more and come back to target. we've talked about this before. this has been an ongoing problem for target. it has lost its cool cachet it
has had in some customers' minds, so target has been striving to get that back. this is the biggest collaboration it has done under the c.e.o. brian cornell. mark: what is the price point for the collection? julie: we are talking about $2 for phone nail polish across the spectrum up to $150. they also have beach towels and lounge chairs that have the lilly pulitzer floral, colorful designs. it is a big collection and is not just include clothing. mark: what other collaborations has target on in the past? how successful have they been? julie: there have been a range of them. missoni got a lot of attention and did well. you also have designers like jason we who have done things with the brand.
the edgier brands were not as successful. target had to mark down the items. lilly pulitzer is seen as a more accessible brand. we are going into the spring and summer season. it is colorful and summary. it is a lot of dresses and bathing suits. to go back to the price point question, if it is two dollars to $150, a typical low" or shift dress is $200. you're talking about getting one for under $50. it features designer names bookmarking them down to target prices. mark: speaking about the buzz you were at bryant park yesterday. how was it? julie: it was crowded but dying down as i got there around midday. in the morning, there were about 500 people in line waiting to get into this thing. it was not very big. it was attached in a tent to a restaurant in bryant park. they were only allowing a certain number of people in at a
time. i was there around 1:00. a lot of stuff left was extra-large sizes. the was not a big selection left because it have been popular. they were imposing a five-item limit. some of it has already ended up on ebay. people apparently were buying it there and posted it straight on ebay. i saw you sneaking a peek. they have the lyrical assert for target back -- lily pulitzer for target bag. here is this scarf thing i got. this is $20 just to give an idea of the stuff. do you want to try it on? mark: how hard is this going to be to come by? julie: it shows on ebay they are selling it at a markup. if you are going to buy it on ebay for more than it originally cost, why not buy it from lilly
pulitzer for $200? they are in limited quantities. it all goes on sale sunday. mark: julie hyman with her lilly pulitzer sarong and bag. thank you. next, we will get you the latest from latin america. our reporter in mexico city with the latin american report for this friday when "bottom line" continues in a moment. ♪
american mobile will decide today on whether to spin off as many as 11,000 wireless towers a move that would create latin america's second-largest printer of tower space. shareholders -- if shareholders are in favor, it would compete with american tower corporation which has more than 8000 towers in mexico and more than 32,000 in latin america. the other sites would rent space to operators. american mobile is controlled by the billionaire. it is studying how to break apart operations in mexico where government reforms aimed at opening up the industry are cutting into profits. now to cuba where pope francis said he may make a stop to his u.s. trip in september. francis is credited with helping the united states and cuba reach their historic decision to normalize relations. the pope met with leaders of both countries and the vatican hosted a delegation for the final talks.
the vatican says the pope is considering the idea of a cuba leg on his trip but the decision is not been made. u.s. president barack obama and cuban leader raul castro met in pamela -- panama. he notified congress intends to drop them from the list of state sponsors of terrorism. these are stories making headlines in latin america. back to you. have a great weekend. mark: thank you so much. next your guide to the biggest newsmakers of this past week on "bottom line." ♪
drug giant. teva has not made a formal approach although mylan is aware of interest. teva is evaluating internally and has approached advisers about a potential bid and financing. attorneys are nearing a recommendation to block comcast's bid to buy time warner cable according to people familiar with the matter. attorneys investigating comcast's $45 billion proposal to create a nationwide cable giant are leaning against the merger out of concern consumers could behind. they could submit their review next week. antitrust lawyers will present their findings to the deputy assistant attorney general for antitrust who will decide along with top officials whether to file a federal lawsuit to block the deal. verizon is breaking the bundle. fios will let customers pick groups of channels they want to watch instead of being forced to buy a bundle of channels they do not want.
pay-t.v. providers are facing pressure from companies like netflix and google to give customers more choice in how they buy channels. hoping to buy in apple watch next friday? you won't be able to walk into an apple store. apple plans to keep orders for the smart watch to its website until at least june because of high demand and limited supplies. many of those who have ordered online will not get theirs until july. hillary clinton is starting to a wall street critic to oversee her campaign's finances. a democrat only with the matter tells phil mattingly mrs. clinton will name gary gensler as her c.e.o. he's a former head of the commodities futures trading commission and a strong advocate for stricter wall street regulations. the move should help her with those who claim she is too cozy with wall street. that is a look at top stories on this friday. coming up, scarlet fu with the
friday edition of "on the markets." and a chat with fortuna investors. later, the c.e.o. and founder of quirky. it is friday so we bring you a look back at the most notable newsmakers from this past week on "bottom line." >> i think her biggest problems are going to be distancing herself from president obama. he has got a 60% disapproval rating. wrong track reading for the economy. she is fighting political history where it is difficult for the same party to hold the white house for 12 years. she has a real problem because if you look back at her record as a senator, secretary of state, there is no signature, schmidt. she will have to explain why she is running for president and has been for 10 years and give the american people a reason why they believe she will call bush something in that job.
>> lending tree connects consumers with lenders of any type. it could be a traditional mortgage company or one of the startup marketplace lenders. we have many companies now coming in to lend money to consumers. they are doing it with high automation in terms of automated underwriting and being able to fulfill a much broader swath of the lending market. >> it depends on the agreement coming out of the committee. frankly, it looks as if there is something in the works to make it bipartisan. even so, if they were to pass it today and it appears they will in the next few days, the question becomes, should it be brought to the floor for a vote prior to the time this agreement is worked out in detail? i think that would be a mistake if they bring it to the floor. >> march and april are tough week as you have the easter shift. this year, the shift came earlier in the month. two weeks earlier this year. that helps. >> last year, we had the cold
january and february. march was nice. this year, february and march were week. there were a lot of moving parts. it was a tough one to get. mark: welcome back. we have breaking news, mylan more about the mylan-teva story. mylan has put out a story on the recent media speculation. mylan says it is fully committed to a standalone strategy. it says the combo without sound industrial logic and it has studied a potential combination with teva. we will continue to follow this story, that breaking news. we will have more coming up on "street smart" with alix steel who joins me to talk about chevron who will be exporting crude to asia a rare move given the u.s. ban on exporting unrefined crude. what do we know about this? alix: you are allowed to export products.
you have to apply for a permit that you can do it. actual crude is rare. in this circumstance, it is allowed but rare. this is according to people familiar with the matter. it caught my eye because it showed there was no other place for this oil to go. there was no other place it could be except asia. that is what is so striking about this. mark: will this lead to more west coast exporters? alix: that was the chatter around the move earlier today. david hackett says it was a one-time deal. it is probably not going to be happening again. the deal is exports cannot exceed 25,000 barrels a day. there are stipulations. you have to get a license from the department of commerce. the state does not have pipeline connections to get it to other places in the country. by rail, it is still risky in the u.s. mark: do you think it is an aberration? alix: it seems it is not the start of a trend but is
something to be aware of considering california has ramped up exports. we continue to see deceleration in the red -- rig count for the 19th straight week. oil rigs are at a four-year low. we heard something similar yesterday saying spinning curves are starting to impact supply in north america and internationally. he thinks supply will tighten further as we go. mark: the u.s. is producing 9.3 billion -- million barrels a day. alix: citi said you are getting better at what we do. the technology is better in the u.s., you can produce more than you have. we had lots of good stuff coming up. the florida congressman will talk about what it means for the u.s. to join ties with cuba particularly removing cuba off the terrorist list. these against that. we will talk about why. they are partnering with mattel this is an innovative company. there's going to be a lot of
mark: get the latest headlines at the top of the hour on bloomberg radio, your tablet and bloomberg.com. that does it for this edition. i am mark crumpton in new york. thanks for joining us. have a great weekend. i will see you monday. >> it is 56 past the hour, that means bloomberg television's on the markets. stock buybacks have helped drive
gains to record levels. they earned the wrath of the founder of black rock. he argues these are short-term measures at the expense of long-term growth. fortuna has crunched the numbers. he joins me now. the message is one he has given in years past. it is not new. why does it resonate more six years into the bull market? >> his message is reinforcing itself. each year, it means more because it is something he's sticking with. his message about investing and not buying back so much stock at the top of the market is good for people to listen to. the market is much higher than it used to be. buying back stock is more expensive. some companies may be sorry about that at some point when the market goes down. scarlet: what does it say about the quality of what we have seen? >> shareprice gains because of buybacks do not tend to be as enduring because of operating improvements.
a lot of times, companies get one time quick pops when they execute a big buyback but it does not endure as well as the growth in earnings from operating performance. scarlet: it is used to cover bad news as well. in cash free distribution, there are buybacks in dividends. they tend to get lumped together. why is buybacks worse than dividends? >> buybacks are a distribution we dividends, but they are also a play on price. defined companies do more buybacks when the stock is expensive and less when it is cheap. the remaining shareholders are worse off. if they bought back more stock when it was cheap and less when it was expensive the remaining shareholders would be better off. scarlet: within the s&p 500, if you look at comedies that reinvest cash -- companies that reinvest cash they do spend some money on buybacks and dividends. 11%. it is not a cash return is inherently bad. >> every company should think
about a balance between investing in the business and distribution. we found companies at the extreme that invest more the top 10% of companies in terms of the proportion of capital they invest back into the business, produced better shareprice performance than companies at the other end of the extreme that the vote most of the capital to distribute into shareholders. scarlet: they are still putting that cash to work. >> very few companies are all the way at the extreme. as you can see from the chart, the top 10% of companies are all most 90 percent one way and 80% the other way. scarlet: let's look at delta airlines. it's been a lot of money on buybacks and has seen a move higher in the share price -- it has spent a lot of money on buybacks and has any move higher in the share price. what does this tell you? >> delta is an interesting case. they have a strong buyback program. we invented a measure that looks at how much the stock costs when you bought it and what it is worth now. it is no different from if you
spent $11 on an acquisition and it went up in value, you could calculate a return. we do the same for buybacks. it was over 50% which put them in the top seven companies in the s&p 500 in the recent ranking we published. the concern i have when i look at the chart is a lot of the buybacks have been after the price has gone up quite a bit. if fisher price does not stay up -- if the share price does not stay up, that could lead to lower by back r.o.i. in the future. scarlet: a warning on the dangers of too many buybacks. "street smart" is next. ♪
alix: welcome to the most important hour of the session. 60 minutes left until the closing bell. i'm alix steel and this is "street smart." the dow off by more than 300 points as the global selloff radiates through markets. two big worry spots, greece and fears of the overheated market in china. breaking news in the past hour. antitrust lawyers are leaning against the comcast-time warner merger. those shares taking a hit on the news. we will have the latest developments. i will be speaking to the quirky c.e.o. on the company's first acquisition and partnership with